According to crypto analytics platform CryptoQuant, the Bitcoin futures market underwent a dramatic deleveraging phase. Open interest initially expanded alongside Bitcoin's move between $115,000 and $125,000 in August–September 2025, but then plunged to as low as $400 million by November 2025 and February 2026, marking some of the largest position closures in that period. By March 2026, the negative zone had narrowed noticeably, with the indicator nearing neutral, while a green area on the chart suggested fresh capital entering the market — hinting that the broad leverage reduction of previous months may be ending.
Negative Funding Rates Accompany Rising Open Interest
A striking feature of the current landscape is the recovery in open interest occurring alongside persistently negative funding rates. In perpetual futures, rates are now predominantly negative, meaning short holders are paying longs — a clear tilt toward bearish bets. CryptoQuant notes that most incoming capital is backing short positions, betting on further price drops. This setup creates the technical risk of a “short squeeze,” where an unexpected price surge forces short sellers to exit at a loss, amplifying buying pressure and triggering a cascade of forced closures.
Key Price Levels Point to $80K–$90K Band
If a rebound materializes, Bitcoin could climb into the $80,000 to $90,000 range — a zone that served as major support and resistance between October 2025 and January 2026, roughly 15–30% above current prices. However, sustaining movement into this band depends on whether open interest not only touches but persists above the neutral threshold. Earlier bursts of positive open interest reversed quickly, indicating that participants remain wary until consistent momentum emerges.
Market Structure Indicators Point to Equilibrium
Weekly metrics reinforce a picture of a market seeking balance. Realized net losses dropped from $2 billion to $264 million; derivatives volumes in altcoins shrank, boosting Bitcoin’s dominance; on Binance, $4.77 billion in Tether sits on the sidelines; and data shows 600,000 Bitcoin purchased below $70,000 provides a solid floor. These signs suggest the broad retracement phase is ending, though organic inflows remain essential for sustained price action. With negative funding and rising open interest, the stage is set for a short squeeze — awaiting a catalyst to ignite the next major move.